Cryptocurrency Exchanges For 2018
Exchanges and wallets
To start off any trading in 2018, you will need a cryptocurrency exchange and a wallet. Cryptocurrency has developed so much over recent years. Here we shall cover all the info you will want to learn and provide you with a list of the top cryptocurrency exchanges for 2018 recommended by experts in the crypto community. At the moment, cryptocurrencies are in a time like no other with so much publicity and so many people wanting to hop on the wagon. Before investing any money in any platform you’ll want to make sure it is safe and secure. Do not worry, you are already on the right track by reading this article for research. Without further to do, let us get started.
What is a wallet?
A wallet is where your cryptocurrency coins are kept. It can be on your phone or on your computer. In a wallet, you control the private keys, which in turn control your funds. No one else can recover your funds should you lose your private key. It can even be in the form of a key written on a piece of paper, which is known to be the safest way to store your crypto funds. It can also be in the form of hardware; which is ideally mobile, such as a pen drive, and then have a notepad/word document file which contains your private key.
A private key looks something like this:
A 64 character code consisting of numbers from 1-9 and letters A-F. The private key is mathematically connected to all your addresses generated in your wallet.
Some popular wallets include:
- Blockchain – currently the most popular wallet for cryptocurrency storage
- Electrum – one of the oldest wallets and one of the best when it comes to ease of use and nice user interface. It is the best bitcoin wallet for desktop, based on its safety and reliability. It boasts two-factor authentication and supports hardware wallets such as cold storage.
Other cryptocurrency wallets include MyEtherWallet, Metercox, Exodus or Jaxx.
What is a cryptocurrency exchange?
A cryptocurrency exchange is akin to a stock market exchange. It is a third-party platform on which you can buy or sell cryptocurrencies. Exchanges such as Coinbase, Kraken, Bittrex requires that you have an account with the company and they hold your keys for you. Your private keys then become public (in the sense that the company has access) and the control of your currencies is not entirely yours.
Cryptocurrency exchanges have their own account on the blockchain with all their customer’s funds in it. In cases of a hack, you lose all your coins. Some wallets offer complex functionality like margin trading with leverages, e.g. Kraken and Coinbase. Most exchanges have wallet-like features but in reality, it is not a real wallet as the exchange holds on to your private key.
It is important to keep in mind that cryptocurrency can only be exchanged to FIAT or another cryptocurrency on an exchange and that there are different types of cryptocurrency exchanges based on the type of services they offer. These include:
These are marketplaces that connect buyers and sellers and they take a fee for each transaction. Each user only interacts with the platform. E.g. Binance, Coinbase
These platforms offer direct person to person trading where individuals from different countries can exchange currency. There is no fixed market price, instead, each seller sets their own exchange rates. E.g. LocalBitcoins, Paxful.
These are websites that anyone can visit to buy cryptocurrency at prices set by the broker. They are similar to foreign exchange dealers. E.g. CryptoGo, Cex.io
Choosing between cryptocurrency exchanges
Many new crypto enthusiasts, after taking a decision to start buying or selling of Bitcoins and altcoins, are sometimes confused on which cryptocurrency exchange to use. Let’s take a look at some factors to consider when choosing a cryptocurrency exchange.
Security is the most important factor when choosing an exchange. It is important to find out, and be sure, that the platform is legitimate and secure. Coincheck, a cryptocurrency exchange in Japan is under scrutiny after hackers stole $530million from its users. This ranks as the biggest of such theft on record eclipsing the estimated $430million in BTC stolen from another Japanese Exchange, Mt. Gox in 2014.
This serves as a serious warning to look into the security protocol of cryptocurrency exchanges. Examples of good security practices include;
- Keeping deposits in cold storage; this means that your coins are tucked away offline, beyond the reach of hackers.
- Two-factor authentication (2FA) option; this makes the account more secure.
- Verification and encryption of email; for every login and transaction on some cryptocurrency exchange, an email is sent for confirmation.
SUPPORTED COIN PAIRS
Many exchanges support only a handful of coins, with the most popular being the top two cryptocurrencies; Bitcoin and Etherrum. Only a few exchanges such as Binance, Bittrex, Poloniex, etc. offer a wide variety of coins.
Coinbase, for example, trades only four major cryptocurrencies; Bitcoin, Ethereum, Litecoin, and Bitcoin cash. Bitstamp also supports only Bitcoin, Ripple, Litecoin and Bitcoin Cash. It is important to choose an exchange that supports all of the cryptocurrency coins that you want to buy or trade with.
Most crypto exchanges have transaction fees which differ across various exchanges. These fees can be for trading, depositing or withdrawing funds. Some exchanges are upfront about their fees depending on the size of the trade and the means of payment. Others offer discounted fees in cases where an exchange-owned token is used to complete transactions.
It is also important to look out for upgrades as this could also cause changes in transaction fees. Bitfinex and Coinbase, the two largest exchanges by US dollar to Bitcoin trade value, are adopting a software called Segwit which is expected to lower transaction fees by as much as 20% while also speeding up transactions.
Good platforms list transaction fees for each trade before you go ahead with the trade.
METHOD OF PURCHASE
If a cryptocurrency exchange has limited payment options, it may be less convenient to use. Some very good platforms allow to buy BTC using Paypal, some require bank deposits, some accept debit and credit cards and for others, purchases can only be done using cryptocurrencies, mainly using Bitcoin or Ethereum.
Liquidity is what sets apart a mediocre exchange from a good exchange. This is the ability to find enough sellers and buyers in the market. High liquidity leads to a better price discovery and trades are executed quickly.
Some specific user functions are only accessible from certain countries. Care should be taken before selecting an exchange to make sure that the country you live in has full access to all platform tools and functions.
- Ease of use
- Efficient and responsive customer support
- Support of hardforks
- Verification requirements
- Exchange rate
Best Cryptocurrency Exchanges
Now that the aforementioned points are fully understood, let me give you a breakdown of the best exchanges in the crypto industry
Coinbase is one of the most popular, well-known brokers and trading platforms in the world. The Coinbase platform has an attractive interface and makes it easy to securely buy Bitcoins, Ethereum, Litecoin and Bitcoin Cash using a debit card. It has an insured online wallet to store your coins and trading can be done with other users on the company’s Global Digital Asset Exchange (GDAX) subsidiary. GDAX currently operates in the US, Europe, UK, Canada, Australia, and Singapore. GDAX does not currently charge any transfer fees for moving funds between your Coinbase account and GDAX account. For now, selection of tradable currencies depends on tour country. Over 30,000,000 users are signed up and the platform records 200 million page-views per month.
- User-friendly and trusted platform.
- Suitable for beginners
- Reasonable fees
- High liquidity
- Insured online wallet
- A slightly hectic verification process
- Limited payment options
- Supports few countries
A Hong Kong based exchange, Binance is another very popular choice across the globe even though it is fairly new to the cryptocurrency exchange industry as it began trading in 2017. It is a bit unique in that it was partially funded by its own ICO (BNB). This has helped Binance to keep a very low transaction fee of 0.1%. It also allows trading of a wide variety of altcoins and verification is straightforward.
- Low fees on transactions and withdrawals
- Offers a vast array of coins including typically rare altcoins
- High liquidity allows for efficient entries and exits
- Effect of Chinese regulations on the exchange brings some uncertainty
- Limited payment options
- Straightforward verification process poses some concerns on integrity
Bittrex is a US based exchange with users all across the world. This exchange supports as many altcoins as possible, including very new and emerging ones. Currently, they support over 250 coins and this dynamism is its most obvious advantage. The UI is pretty good and gives a fairly high number of technical analysis tools for those who are interested. However, a common complaint with Bittrex is high transaction fees, with a charge of 0.25% on all trades.
Currently, new registrations are on hold and only corporate accounts are being accepted.
- Supports many countries
- More than 250 trading pairs
- Currently the most visited altcoin exchange with over 150 million monthly visits
- High liquidity for big trades
- New account registration temporarily disabled to cope with demand.
- Hectic verification process
- Limited payment options
LocalBitcoins is a Peer-2-Peer Bitcoin exchange with buyers and sellers in thousands of cities around the world. With LocalBitcoins, you can meet up with people in your local area and buy or sell Bitcoins in cash, send money through PayPal, Skrill or Dwolla or arrange to deposit cash at a bank branch. LocalBitcoins only take a commission of 1% from the sellers who set their own exchange rates. To ensure trading is secure, LocalBitcoins takes a number of precautions. To start with, once a trade is requested, the money is held on LocalBitcoins’ escrow service. After the seller confirms the trade is completed, the funds are released. If something goes unexpectedly wrong, LocalBitcoins has a ‘Support and conflict resolution team’ to resolve conflicts between buyers and sellers.
- PayPal is available
- Verification isn’t required
- Available worldwide
- Beginner friendly
- Transactions may take longer to complete
- Risks associated with anonymous transactions
The platform lets users easily trade fiat money with cryptocurrencies and vice-versa through bank transfers and credit cards. For those looking to trade Bitcoins professionally, the platform offers personalized and user-friendly trading dashboards and margin trading. Good security practices are implemented in a modern and user-friendly interface. It is worth noting that CEX.io has implemented Know Your Customer (KYC) and Anti-Money Laundering (AML) measures. This means you’ll need to verify your identity before trading.
One downside of using this exchange, however, is the high fee when paying with credit cards.
- Allows bank transfer and credit card deposits
- Very easy to use & great for beginners
- Supported worldwide
- Tedious verification process
- Depositing is expensive
CoinMama is a veteran broker cryptocurrency exchange that allows buying of Bitcoin or Ethereum using your credit card or cash via MoneyGram. It is great for those who want to make instant purchases of cryptocurrency using their local currency. However, users cannot sell to the cryptocurrency exchange. Although it is available worldwide, users should be aware that some countries may not be able to use all the functions of the site. CoinMama is available in English, German, French, Italian and Russian.
- Fast transactions
- Availability to buy with credit card in most countries
- High transaction fees
- No option to sell
- Average user support
Bitstamp is a European Union based Bitcoin marketplace founded in 2011. The platform is one of the first generation Bitcoin exchanges that has built up a loyal customer base. Bitstamp is well known and trusted throughout the Bitcoin community as a safe platform. It offers advanced security features such as two-step authentication, multisig technology for its wallet and fully insured cold storage. Bitstamp has 24/7 support and a multilingual user interface and getting started is relatively easy. Both Euro and US dollar deposits are accepted with credit cards.
- Highly secure
- Available worldwide
- Card purchases available in Europe and the USA.
- Good for large transactions
- Limited payment options
- High deposit fees
This cryptocurrency exchange is an exchange used for buying and selling Bitcoins and it is based in Cincinnati, US. It is the first Bitcoin marketplace to provide public proof of reserve in February of 2014, they are focused on the worldwide market and accept traders from all continents. Verification isn’t needed in order to buy or sell Bitcoins although in some cases, the SMS verification or document submission may be requested by the exchange. They accept fiat currencies and deposits and withdrawals can be made with cash transfer and SEPA transfer only.
- Probably the fastest way to buy and sell BTC
- Trading with cash
- High transaction fees
- Limited payment options
- Supports only BTC
Changelly is a trustable cryptocurrency exchange which allows you to exchange one cryptocurrency for another in the most convenient way possible. It does this by suggesting the best rates directly on its website. It has a robot integrated into other cryptocurrency exchanges such as Poloniex and Bittrex. In a matter of milliseconds, the robot suggests the best available rate on its website. Given the volatility around cryptocurrency, the platform does not fix rates. This enables the company to charge a very low commission fee for facilitating trades. Changelly does not accept fiat currency conversions. However, you can use the US dollar or the Euro to purchase more than 35 cryptocurrencies.
- Available worldwide
- Accepts purchase of cryptocurrencies with debit or credit cards in Euro or US Dollars
- Low commission fees on crypto-to-crypto conversions
- Limited payment options
- Higher rates than other exchanges when purchasing Cryptocurrency directly
Luno, formerly known as Bitx, is a Cryptocurrency exchange and wallet provider that offers only Bitcoin and Ethereum trading. Launched in 2013, their reach is massive, reaching over 42 countries. It is similar to Coinbase but limitations to Bitcoin and Ethereum reduces its draw for traders however they cover a lot of countries
- User-friendly interface
- Fast and easy account creation
- Mobile app
- Only allows BTC trading
- Limited features in Europe.
- High trading fees.
Paxful is a peer-to-peer Cryptocurrency marketplace connecting buyers with sellers of Bitcoin only. It is a very impressive platform as it supports over 300 payment options. It is also the best exchange for gift cards to bitcoin
- Hundreds of payment methods such as Paypal, Skrill and NetTeller, cash – or even iTunes & Amazon gift cards.
- No fee for buyers
- A good alternative for relatively anonymous purchasing
- No ID required
- Significantly higher fees compared to other p2p platforms like LocalBitcoins
- Duplicate sellers
Choosing the best of the best exchanges
When choosing a cryptocurrency exchange, it is important to balance a number of different considerations. Exchanges are all different and they have different ways of building security precautions, regulating users, building their network, and building a user experience.
Overall, try to be knowledgeable about all your options and requirements. Think about the types of cryptocurrency coins you would like to trade, your geographical region and how much you would like to invest. Eventually, try to spot the exchange that is the safest and one which you think can be one of the biggest in 6 months time. Choosing any cryptocurrency exchange from the above is a safe bet.
Let us take a quick peek into the world of cryptocurrencies
When Satoshi Nakamoto invented Bitcoin in late 2008 before it went online in early 2009, his goal was to develop “A Peer-to-Peer electronic cash system”. The most important part of his invention was the decentralized digital cash system he built.
This system has no server or central authority. In the nineties, there were many attempts to create digital money but all failed. Satoshi’s decision to build a digital cash system without a central entity was the missing piece he found to realize digital cash. The decentralized control of each Cryptocurrency works through a blockchain which is a public transaction database, functioning as a distributed ledger. Cryptocurrency came as a side product of this enormous and record-breaking invention.
In simple terms, cryptocurrency is a form of digital currency, designed to be secure and, in many cases, anonymous. They are built on cryptography which is used to secure its transactions, verify the transfer and control the creation of additional units.
Bitcoin, created by Satoshi, was the first Cryptocurrency and since then, numerous other Cryptocurrencies have been created based on his invention. These other Cryptocurrencies are called altcoins, which is a shortened form of alternative coin.
What makes cryptocurrencies standout?
- Transactions are irreversible
Transactions cannot be reversed after confirmation, not even by Satoshi or any miner. Therefore proper care should be taken before sending it to anyone or to any address.
Cryptocurrencies are received using addresses which consists of around 30 characters. The transaction flow can be analyzed but it is not possible to connect the real world identity of users with the address. Therefore, it is pseudonymous rather than anonymous.
- Fast and globally accessible
Transactions are processed nearly instantly and are confirmed in minutes, they are also indifferent of the location of the sender or receiver.
Cryptocurrencies are locked in a cryptography system. Only the owner of the ‘private key’ can send or have access to it.
Anyone can transact Cryptocurrency without taking permissions from anyone, organization or government. Transactions can also be done right in the comfort of your rooms in cell phones or computers connected to the internet.
Most Cryptocurrencies are limited in supply. Bitcoin has a total supply of 21million and has been predicted to reach its final number around 2140.
Most traded cryptocurrency coins
By far Bitcoin remains the most popular and most commonly traded cryptocurrency today. However, there are other cryptocurrencies with huge trade volumes and acceptability. These include:
It is the first, most popular and most commonly traded Cryptocurrency till date. It serves as a digital standard in the whole Cryptocurrency industry. As of December 2017, there were around 16.7m bitcoins in circulation. The value of each has gotten to a peak of around $20000 for a market value of $230billion.
This was discovered in 2015 by a crypto-genius, Vitalik Buterin. It is the second most common and valuable. As at Dec. 2017, it had a market capitalization of around $67million. In 2016, a major hack led to its splitting into two currencies and this led to the emergence of Ethereum Classic. Its value in recent months reached as high as $840 having crashed briefly to as low as 10cents previously.
Founded in 2012, it is more about a network used to track transactions than the Cryptocurrency itself. XRP, which is the Cryptocurrency doesn’t serve as a medium to store or exchange value but more of a token to protect the network against spam.
Ripple labs created very XRP token and distribute them at will. It is therefore often pre-mined as many do not see it as Cryptocurrency and not considered a good store of value.
It was the first Cryptocurrency after the invention of Btc. It was a real innovation, regarded to be the most similar form to Btc, however, it is faster, has a larger amount of token and a new mining algorithm. The emergence of Litecoin facilitated the invention of other Cryptocurrency which used its codebase e.g. Dogecoin or Feathercoin
Litecoin failed to find real-life usage and lost its second place. It is still being developed, traded and hoarded as a backup if BTC fails-which may never happen
Besides all the Cryptocurrency listed above, there are hundreds of Cryptocurrency of several families. Most are however nothing more than attempt to reach investors and quickly make money but a lot of them promise playgrounds to test innovations in Cryptocurrency technology.
Other Cryptocurrencies include Monero, Neo, Qtum, Tron, Ada, Verge, Dogecoin and many more.
The Cryptocurrency market is maturing, but still, traders need to take caution. Try as much as possible minimize your risks, do not put your money in a single exchange, and don’t store money on exchanges. More research should be done about any cryptocurrency of interest and the best exchange for it.
Do not be afraid to sign-up with a number of different exchanges and use them all.